SAN FRANCISCO-San Francisco, which previously held the number two spot among foreign investors for their real estate dollars, has fallen to the fourth place spot, according to the 10th annual survey of the Association of Foreign Investors in Real Estate (AFIRE).

San Francisco has held one of the top spot since 1997, holding third place since 2000. Other cities making the list include Washington, DC and New York in a tie for first place, followed by Boston, Chicago and Los Angeles respectively. Kingsley Associates, a real estate research firm, conducted the survey in early October among AFIRE members.

“Our perspective on the San Francisco market is as the largest owner of Class A office buildings in the Financial District,” says Glenn Shannon, President of Shorenstein Company. “We do not own any property in the San Francisco submarkets that rose to prominence and have now fallen back as part of the technology boom and bust. The recent problems of many technology companies have had relatively modest impact on most Financial District properties.”

“While rental rates have fallen back to about 1998 levels because the “push” from technology demand has disappeared, occupancy remains solid and net rents remain attractive,” adds Shannon. “The overall Financial District direct vacancy is around 7% and in our own portfolio it is less than 2%. Most importantly, San Francisco is and will remain one of the premier US business centers. We are a city of diverse businesses with a well-educated workforce, world-renown universities and a high quality of life.”

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